Dow, Ineos, focus on debt issues

Dow and Ineos are two of the world’s largest chemical companies. Both found themselves in tight financial situations at the start of the year. Dow’s debt rating was cut to just above junk, whilst Ineos had to ask for covenant waivers.

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Since then, Dow has moved to tackle its debt issues very energetically. First it sold Morton Salt for $1.7bn. Then it sold $2.25bn of new equity, whilst successfully refinancing $4.65bn of long-term debt. Now it has announced further sales of its calcium chloride and TRN refining businesses for $925m.


Ineos has not yet announced asset sales. And the company has had to ask lenders for an extension to July for its covenant waivers, whilst discussions continued on its proposed new business plan. However, CFO John Reece told Reuters last week that ‘there was “a lot of activity” in the company’s plans to sell assets, with proceeds to be used to pay off debt’.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. Paul is also an invited member of the World Economic Forum’s Global Agenda Council. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such as oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.


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